Ferndale faces $1 million budget deficit

FERNDALE -- The city is facing a $1 million budget deficit and several firefighters could be laid off when a federal grant funding their jobs expires in a few months.

City officials will consider making other cuts before they finalize any decisions on layoffs, said City Manager April Lynch.

"We'll look at personnel last," she said, "We will back off on street projects and capital (improvements), but there is the possibility of layoffs for some or all" of the four affected firefighters.

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City Council members this week started working on the budget for the upcoming fiscal year, which begins July 1. Cuts will have to be finalized by the time the budget has to be approved May 10.

Ferndale received a two-year federal grant to help fund four firefighter positions that expires in June. Mayor Dave Coulter said the city applied for another grant, but failed to get it.

"That means we are losing about $400,000 to fund those firefighter positions," Coulter said. "It's too early to tell if there will be layoffs of firefighters. We would like to stay at full staffing and we're going to have to be creative."

Additionally, property values in Ferndale declined 6 percent this year, meaning the city will get about $600,000 less from property taxes for the city's general fund, Coulter said.

Based on earlier projections from the county, Ferndale officials had expected a decline in property values of just 1 percent this year.

On top of that, the city faces increases in ongoing expenses such as employee health care and other costs.

"We want to keep the firefighter staffing as high as we can but we have to do it within the budget we have," Coulter said. "That's the challenge."

The looming deficit will push back a recent city effort to spend additional money improving more than a dozen public parks.

Park improvements were one of the City Council's major goals for the upcoming year.

Lynch said the city will have to scale back those plans and seeks whatever grants might be available to fund park improvements.

"It will be a slower process," she said of the park upgrades.

City Council members are scheduled to meet for their next budget session at 5:30 p.m. Monday at City Hall before their regular meeting begins at 7 p.m.

Revenue from property taxes -- the financial lifeblood of all municipalities -- took a hit in most communities nationwide during the recent recession. Older suburbs near Detroit, such as Ferndale, Oak Park, Hazel Park and others were especially hard hit.

"The recession may be over," Coulter said. "But for local governments like ours, and many of our residents, it is not."